Ep. 206 - Alex Osterwalder, Co-founder of Strategyzer & Author of The Invincible Company on Building Innovative Companies

Inside Outside Innovation is the podcast that brings you the best and the brightest in the world of startups and innovation. I'm your host, Brian Ardinger founder of Insideoutside.io, a provider of research, events, and consulting services that help innovators and entrepreneurs build better products, launch new ideas, and compete in a world of change and disruption. Each week we'll give you a front row seat to the latest thinking, tools, tactics, and trends, in collaborative innovation. Let's get started.

Interview Transcript

Brian Ardinger:  Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger and as always, we have another amazing guest. I'm so excited. Alexander Osterwalder is a Swiss business scientist, entrepreneur, author, and strategy consultant. You probably know him if you've tuned in, based on his work on Business Model Generation. He's written the Value Proposition Design, Testing Business Ideas, co-founder of Strategyzer, and author of the new book, The Invincible Company. That's why we wanted to have him on the show. So welcome Alex. 

Alexander Osterwalder: Pleasure to be here. Thanks for having me.

Brian Ardinger: Well, I'm excited to have you here. You're coming to us all the way from Switzerland, but you've always been a big mentor of mine. And a lot of the folks that you have around your circle, whether it's David Bland or Tendayi Viki and that. We've learned quite a bit about corporate innovation, startup innovation, and I wanted you to have you on the show to talk about your new book and some of the new things that you're seeing in this world. For folks who aren't as familiar with your work, can you give us an arc of how you started with Business Model Generation and how you got into The Invincible Company? 

Alexander Osterwalder: That's going back pretty far. Right. But years ago, we published a book called Business Model Generation. Actually, published it with my former PhD Supervisor Yves Pigneur. He's an academic. And I went out into the business world and our idea was, you know, bringing a better way to describe and change business models to the world. So, we created the business model canvas, which comes out of my PhD dissertation and the tool and the book took off like crazy.

So now there are millions, literally millions of people around the world using the Business Model Canvas, which is this simple tool to sketch out business models. And then the book took off and is now selling over 50 languages. So, it was really fun to see how that took off. But again, it's one tool and one tool doesn't solve everything. Right? I like to make this analogy. If your surgeon walks into the operating theater with a Swiss army knife, you're going to run away. Right. There is no one business tool that does everything, and that was never our intention with the Business Model Canvas. So over time companies we were working with, we were seeing the different challenges that they had when it comes to innovation.

So, we expanded the toolbox and, you know, the big, first expansion, it was meeting Steve Blank, the father of the Lean Startup movement, and then putting that tool set together. And then Eric Reese made it popular throughout the world. Right. So that was the next kind of step. And then we just always asked ourselves, okay, what does the world now need based on the problems we see. And we always say, when companies can't innovate, we don't blame them. We blame us. We say, okay, the thinkers and authors and doers and educators are not doing a good job. Consultant's not doing a good job. So I don't like blaming companies and saying, they don't know how to do this. They don't know how to do this because nobody's showing them right. Nobody becomes a surgeon or an innovation surgeon overnight. So that's how we kind of evolve with our books. Second one was Value Proposition Design. Third one was that Testing Business Ideas with where David Bland was the lead author.

And then the last one is Invincible Companies where we really realized, Hey, a couple of things missing that we need to bring to the table because we always ask, does the world need another business book? Very rarely yes. The answer, but we arrogantly think every now and then this is a yes. So here it's two topics that we really looked at.

What do leaders need to understand in order to build innovative companies? And the second part is the business model topic, we believe is still not fully explored. So we help people design better business models. So, leadership to really innovate constantly. The other one is how to bring better business models to the world to stay ahead of everybody else. Because I think innovation today is stuck in product and technology innovation. Not good enough. It's a game you cannot win. I'm not saying you don't need technology innovation, but you can't stay ahead with that. So, we go a little bit further and show what leaders need to do to build, we call it the invincible company, you could also call it resilient or defensible company. 

Brian Ardinger:  We are recording this live as part of our Inside Outside Innovation podcast series. But because it is live, we do have a number of people in the audience, and we want to make this as interactive as possible. So, I'll ask some questions and that, but if you have a question for Alexander, you can go to the Q and A bubble at the bottom of your resume there and put it into the Q and A box there. And we will try to get that answered. Please start putting in your Q and A questions as we go along. Why do you think companies need to pursue this systematic reinvention?  What's changed versus years ago when you could keep your business model forever?

Alexander Osterwalder: Maybe actually let me draw something here. So, let's see if I can share my screen. Traditionally, every company starts with an idea. You can even take a Nestle, biggest food company of the world, they started with an idea. And then what happens with a startup? Is it tries to become a real company? Right? So, let me just draw this a little building here. Let's call this a $1 billion company. Now, traditionally, people write a business plan or used to write a business plan. It has this wonderful thing going up here, but business plans don't really work because the innovation journey and entrepreneurship journey is a messy one, right. Ups and downs. And then you try something. Customers say they don't like this. They don't want to pay for it. And if you survive this journey, okay, good ideas, good technologies. Rest in peace. You become this real company. 

Now here's what happens afterwards. Once you've found a business small and you scale it. You don't focus on this search anymore on this exploration, but you focus on scaling and managing, right. You're manage. And we call those two worlds here, Explore, which is the world of entrepreneurship and innovation and Exploit, which is the world of managing a business. So, what actually happened, let's say over the last, you know, 100, 200, 300 years of business. Is that companies got better and better at managing what they have, but because they focus on that, it's almost like they forgot this exploration skill.

And that was okay for a long time because the world was moving very fast. You had to do product innovation, but your business small would usually be very stable for a long time. Even in one indu...